Thursday, June 21, 2018 5:36:45 PM
https://simplywall.st/stocks/ca/materials/tsxv-caf/canaf-group-shares/news/how-financially-strong-is-canaf-group-inc-cvecaf/
Autumn Haas June 22, 2018
While small-cap stocks, such as Canaf Group Inc (CVE:CAF) with its market cap of CA$5.45m, are popular for their explosive growth, investors should also be aware of their balance sheet to judge whether the company can survive a downturn. So, understanding the company’s financial health becomes vital, since poor capital management may bring about bankruptcies, which occur at a higher rate for small-caps. Here are few basic financial health checks you should consider before taking the plunge. However, since I only look at basic financial figures, I recommend you dig deeper yourself into CAF here.
Does CAF produce enough cash relative to debt?
CAF has shrunken its total debt levels in the last twelve months, from CA$702.23k to CA$416.88k , which is made up of current and long term debt. With this debt repayment, the current cash and short-term investment levels stands at CA$453.61k , ready to deploy into the business. Moreover, CAF has produced CA$587.51k in operating cash flow over the same time period, leading to an operating cash to total debt ratio of 140.93%, meaning that CAF’s current level of operating cash is high enough to cover debt. This ratio can also be interpreted as a measure of efficiency as an alternative to return on assets. In CAF’s case, it is able to generate 1.41x cash from its debt capital.
Can CAF pay its short-term liabilities?
At the current liabilities level of CA$1.18m liabilities, it appears that the company has maintained a safe level of current assets to meet its obligations, with the current ratio last standing at 1.93x. For Metals and Mining companies, this ratio is within a sensible range as there’s enough of a cash buffer without holding too capital in low return investments.
TSXV:CAF Historical Debt June 21st 18
TSXV:CAF Historical Debt June 21st 18
Does CAF face the risk of succumbing to its debt-load?
With debt at 16.11% of equity, CAF may be thought of as appropriately levered. This range is considered safe as CAF is not taking on too much debt obligation, which may be constraining for future growth. We can test if CAF’s debt levels are sustainable by measuring interest payments against earnings of a company. Ideally, earnings before interest and tax (EBIT) should cover net interest by at least three times. For CAF, the ratio of 10.57x suggests that interest is comfortably covered, which means that debtors may be willing to loan the company more money, giving CAF ample headroom to grow its debt facilities.
Next Steps:
CAF has demonstrated its ability to generate sufficient levels of cash flow, while its debt hovers at a safe level. In addition to this, the company exhibits proper management of current assets and upcoming liabilities. Keep in mind I haven’t considered other factors such as how CAF has been performing in the past. You should continue to research Canaf Group to get a better picture of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for CAF’s future growth? Take a look at our free research report of analyst consensus for CAF’s outlook.
Historical Performance: What has CAF’s returns been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
Recent CAF News
- Form N-CSRS - Certified Shareholder Report, Semi-Annual • Edgar (US Regulatory) • 09/04/2024 02:49:16 PM
- Form N-PX - Annual Report of proxy voting record of management investment companies • Edgar (US Regulatory) • 08/30/2024 10:27:44 AM
- Form NPORT-P - Monthly Portfolio Investments Report on Form N-PORT (Public) • Edgar (US Regulatory) • 05/29/2024 03:14:32 PM
- Form N-CSR - Certified Shareholder Report • Edgar (US Regulatory) • 03/07/2024 03:40:57 PM
- Form SC TO-I/A - Tender offer statement by Issuer: [Amend] • Edgar (US Regulatory) • 02/23/2024 09:41:31 PM
- Morgan Stanley China A Share Fund, Inc. Announces Final Results of Tender Offer • Business Wire • 02/23/2024 09:00:00 PM
- Form SC TO-I/A - Tender offer statement by Issuer: [Amend] • Edgar (US Regulatory) • 02/21/2024 04:28:26 PM
- Morgan Stanley China A Share Fund, Inc. Announces Preliminary Results of Tender Offer • Business Wire • 02/21/2024 03:05:00 PM
- Form SC 13G/A - Statement of acquisition of beneficial ownership by individuals: [Amend] • Edgar (US Regulatory) • 02/08/2024 06:17:42 PM
- Form SC TO-I - Tender offer statement by Issuer • Edgar (US Regulatory) • 01/22/2024 05:38:37 PM
- Form SC 13G/A - Statement of acquisition of beneficial ownership by individuals: [Amend] • Edgar (US Regulatory) • 01/12/2024 12:18:08 PM
- Form SC TO-C - Written communication relating to an issuer or third party • Edgar (US Regulatory) • 12/07/2023 09:30:27 PM
- Morgan Stanley China A Share Fund, Inc. Announces Tender Offer • Business Wire • 12/07/2023 09:00:00 PM
- Morgan Stanley China A Share Fund, Inc. Declares a Dividend • Business Wire • 12/05/2023 09:30:00 PM
- Form NPORT-P - Monthly Portfolio Investments Report on Form N-PORT (Public) • Edgar (US Regulatory) • 11/28/2023 04:24:41 PM
FEATURED Element79 Gold Corp. Appoints Kevin Arias as Advisor to the Board of Directors, Strengthening Strategic Leadership • Sep 18, 2024 10:29 AM
Mawson Finland Limited Further Expands the Known Mineralized Zones at Rajapalot: Palokas step-out drills 7 metres @ 9.1 g/t gold & 706 ppm cobalt • MFL • Sep 17, 2024 9:02 AM
PickleJar Announces Integration With OptCulture to Deliver Holistic Fan Experiences at Venue Point of Sale • PKLE • Sep 17, 2024 8:00 AM
North Bay Resources Announces Mt. Vernon Gold Mine Bulk Sample, Sierra County, California • NBRI • Sep 11, 2024 9:15 AM
One World Products Issues Shareholder Update Letter • OWPC • Sep 11, 2024 7:27 AM
Kona Gold Beverage Inc. Reports $1.225 Million in Revenue and $133,000 Net Profit for the Quarter • KGKG • Sep 10, 2024 1:30 PM